Morgan Stanley Downgraded Indonesian Equity to Underweight

* June 1, 2011, 9:29 AM ET

Morgan Stanley’s Top Picks In Emerging Markets: China, Brazil, Korea & Taiwan

By Murray Coleman

Analysts at Morgan Stanley Smith Barney in a note this morning are advising clients that they’ve made several changes in their emerging markets model ETF portfolio. The moves are tied to the firm’s equity strategists’ views on developing countries.

The ratings moves in MSSB’s emerging markets ETF portfolio include:

• Brazil (EWZ) and Korea (EWY) were upgraded from equal-weight to overweight.
• Indonesia (EIDO)was downgraded from equal-weight to underweight.

The model’s emerging markets exposure is now focused around four ETFs:

• China (GXC) at nearly 21% (vs. 17.8% for the MSCI EM index).
• Brazil at roughly 17% (vs. 15.4% for the benchmark).
• Korea at around 16% (vs. 14.4% for the index).
• Taiwan (EWT) at 11.6% (same as benchmark).

In all, the EM model portfolio contains 18 different ETFs slicing and dicing developing markets by country. But the top four account for nearly 66% of the portfolio.

The other significant weighting is Russia (RSX) with 9.7%, overweight the benchmark’s 6.7%.

http://blogs.barrons.com/focusonfunds/2011/06/01/morgan-stanleys-top-picks-in-emerging-markets-china-brazil-korea-taiwan/?mod=BOLBlog